Rusnano warns of possible insolvency, unable to meet all obligations in 2023 on its own

MOSCOW. Oct 4 (Interfax) - Rusnano, whose financial problems were the main topic on Russia's domestic bond market at the end of 2021 and beginning of 2022, has warned that it is unable to meet debt obligations with its own funds and will likely head into bankruptcy if the government does not step in to provide liquidity to fulfil obligations to creditors.

Creditors' claims, not including interest on loans and accumulated coupon income on bonds, significantly exceeded the value of the company's assets at the end of the first half of 2023, Rusnano said in a report.

"Given the size of the payables in the form of loans and bond debt due to be repaid before the end of 2023, Rusnano's fulfilment of debt obligations in full exclusively with its own funds is objectively impossible," the report said.

Therefore, Rusnano currently "meets the criteria for insolvency and insufficiency of assets" as defined by the law "On insolvency (bankruptcy)," the report said.

"If JSC Rusnano's shareholder does not make a decision to normalize accounting (financial) statements and provide (restore) liquidity for fulfillment of obligations to creditors, including in the face of budget and other regulatory restrictions, it is highly likely that signs of bankruptcy will appear," the company warned.

Rusnano's net debt stood at 95.56 billion rubles as of June 30, up from 90.85 billion rubles at the start of the year. The company is due to redeem an issue of exchange-traded bonds totalling 10 billion rubles in December, the report said.